Question

No Transient Residential Rental Option in Turbotax Premier

Forum|Forum|3 years ago
March 8, 2023
1 reply
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We have a transient airbnb residential rental property (less than 7-day average stay). Because it is considered "transient," it is supposed to use the commercial 39-year depreciation table. But it should still be schedule E passive income (i.e. no schedule C self-employment tax and still subject to passive loss rules).

The problem is that Turbotax Premier has no category for this. It's "Property Assets" series of questions, it never asks for the average length of stay. The only way for me to get this on a 39-year depreciation table would be to lie and say that we are material participation in the property, which we do not. And if I did lie and say that we were actively involved, it would put me on Schedule C, which is incorrect.

So I am forced to either do 27.5 year depreciation and Schedule E, or 39-years and Schedule C, but I should be 39-years and Schedule E!!!

AmyC

Employee

You do need to mark your rental property as commercial property for proper depreciation. You are correct that transient rentals can force you to depreciate at the commercial level. Please follow these steps:

open your return
return to your rental
select Property Profile
on What type of Rental is This? select commercial
continue through the section to Summary
Select Assets/Depreciation
Describe this Asset, select Rental Real Estate Property
continue
Tell Us a Little More, select Non-Residential Real Estate and Improvements
continue
How would you categorize this asset? Select Nonresidential real estate
continue
Enter amount paid and land value portion of the price
continue entering information

For more on rentals and transiency, see Pub 527.

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K

KDS1723Author

Thanks. Do you know if this will force me to put this income on schedule C instead of schedule E, or will it still allow schedule E.

Also, we do use the property for personal use as well as rental. But still mark as commercial?

PatriciaV

Employee

Begin reporting your rental activity under the Rental Properties topic in TurboTax to create Schedule E where you can report your rental income and expenses. As part of that interview, you will be asked for the number of rental days and personal use days.

The Rental Assets you enter for your Rental Property can be of several types, as AmyC posted above. Commercial properties are often included for Schedule E, so choosing that type of asset will not change your activity from a rental to Schedule C.

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